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Sample Masters E-commerce Dissertation Chapter

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How have online e-business Strategies of companies contributed to adding value to their business by improving the customer shopping experience

Chapter 2: Literature Review

Introduction

Customer experience is the holistic perception of customers that consumers perceive from their experience of shopping from a particular brand or organisation (Terblanche, 2018). It is considered a result of customer interaction with the business. The interaction is done by companies with the help of customer service, navigating customers to the website or store, and the way of receiving their products or services.

In a traditional business environment based in brick-and-mortar shops, the experience customers perceive is easier to provide than online businesses. It is because the offline-based experience of customers is visual and realistic. Concerning the issues, e-businesses have come up with online strategies that can help them in adding value to the customer shopping experience (Kasasbeh, Harada, & Noor, 2017).

Some common strategies implemented by e-businesses are a simplified user interface, a strong presence in social media, offering special subscriptions, and augmented reality. This research chapter focuses on the theoretical information and literature associated with the topic. The chapter will discuss the literature based on the objectives of the study.

The areas that will be discussed in the chapter are the concept of the customer shopping experience, online business strategies of e-retailers that are adding value to the customer shopping experience, the positive and negative side of e-business by the fashion retailers, and the role of e-business strategies on providing value to the customers.

Concept of customer shopping experience

The customer shopping experience is a phenomenon that is entirely dependent on the adoption of strategies by the organisations and their effectiveness to provide customer satisfaction. According to Choi, Yang, Yang, & Cheung (2015), delivering a positive shopping experience to the customers is important for organisations.

With the provision of a better experience to the customers, businesses can increase their customer retention rate as well as positive reviews from the customers. Simultaneously, positive reviews help a company reduce the frequency or friction of receiving customer returns and complaints.

In a traditional business based on offline or brick-and-mortar shops, providing customers a great shopping experience is easy. In brick-and-mortar shops, customers can perceive and feel their shopping experience as the products available are visible in realistic mode.

However, providing a better shopping experience to the customers is quite difficult for the business operating on the online platform (Bilgihan, Kandampully, & Zhang, 2016). Considering the issues, online businesses have focused on adopting innovative strategies to help them deliver a good customer
experience.

Following Izogo & Jayawardhena (2018), customer shopping experience is related to customer psychology. Customer psychology defines a concept that describes why people purchase a product. From the business perspective, it is considered a tool used to explain the aspects businesses want from customers.

While the intention of customers to purchase a product in an online shopping platform is dependable on the convenience of shopping, easy to find products, simplified user interface, options to choose a product by considering the size, colors, etc. (Wong & Wei, 2018).

Availability of a wide range of products and convenient customer service also plays a key role in providing an effective shopping experience to the customers in the online platform. Delivery or shipment of products, as well as suitable options for payment, is also related to the customer’s shopping experience.

The added value of fashion retailers

According to Ažman & Gomišček (2015), the firms operating across the fashion industry intend to provide added value to the customers by differentiating their products and services and increasing the probability of sales. The value represents the customers’ perception regarding the worth of a product or service compared to the possible alternatives available in the market.

The fashion retailers focus on maximising the customers’ perceived value by considering multiple factors including the cost and quality of the products and the customer service. As per Srinivasan, Anderson, & Ponnavolu (2002), the company’s value provides an incremental benefit to the customers by consuming the product in exchange for the monetary value.

The fashion retailers have undertaken the strategy of reducing the cost of products while selling online due to the lower cost of establishment and maintenance of the stores along with increasing the focus on quality for ensuring customer satisfaction and loyalty (Ažman & Gomišček, 2015).

The fashion retailers intend to deliver high-quality customer service to increase their value parameters and customer satisfaction. Fashion retailers have undertaken strategies like using virtual trial rooms powered with augmented reality technology, chatbots, and data analytics to increase customers’ value perception.

It enables the customers to try the products online to reduce confusion and doubts and receive 24/7 service and chat assistance for helping with their queries. The integration of website analytics also enables the customers to receive a list of recommended products based on their past product searches and purchase.

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Assessment of e-business online strategies that adds value via the improvement of customer shopping experience

The study of Kumar & Anjaly (2017) claimed that customer shopping experience is a phenomenon that can add value to the businesses. With a positive customer shopping experience, a business can add value in terms of increased customer loyalty, customer satisfaction, the word-of-mouth strategy, and positive reviews in the online platform. These aspects are valuable for companies to maintain growth in the market as the presence of strong customer loyalty, customer satisfaction leads to increased customer retention and sales.

Customer loyalty is a concept that explains the tendency of customers does repeat business with a particular firm or brand. Customer loyalty is a result come from positive customer satisfaction. While, customer satisfaction is about the customer’s happiness with the product, service of a company which can be provided with a good customer shopping experience.

The major difference of shopping from offline and online businesses has forced e-businesses to adopt strategies that can help in added value through the improvement of the shopping experience. According to Khan & Uwemi (2018), technological advancement has made it easier for e-businesses to adopt strategies to improve customer shopping experience.

Artificial Intelligence has become a major contributor to improving customer shopping experience. With the adoption of artificial intelligence, companies are introducing new technology like Chatbot to deliver a good quality of customer services. A chatbot is a software application that simulates human conversations through an interaction between customers and machines.

Through the application, customers can have formal conversations and raise queries or basic complaints against the services or products purchased. The strategies based on Artificial Intelligence or AI is helping the e-businesses to provide quick solutions to the customers. Oliveira & Toaldo (2015), commented that basic aspects of customers purchasing intention from e-businesses are to receive quality service before and after-sales.

Customers tend to ask for the features of a product along with the price-related queries the e-commerce business can deliver using Chatbot and without problems. Delay in shipping, receiving wrong products, the issue with the quality of products are related to ongoing and after sales service to the customers. In such a case, the companies use Chatbot to deliver basic solutions.

The theory of Reasoned Action can be considered to describe that customers always look for receiving a particular outcome from a business. If such intention of customers does not meet with the basic features of products then the problems arise. For this reason, e-businesses have considered using Chatbot to deliver better customer satisfaction and shopping experience.

Along with the strategies of using Chatbot, e-businesses also focus on using augmented reality. By using augmented reality as a part of technological strategies, e-commerce businesses can provide options for trial and a realistic sense of shopping. The study of Omar, Saadan, & Seman (2015), claimed that many customers do not prefer to purchase from e-businesses due to a lack of trial options. The author also explained that augmented reality has made it easy for e-businesses to provide a realistic shopping experience and added value to customer satisfaction.

However, Fayad & Paper (2015), argued with the fact and commented that augmented reality cannot provide satisfaction that the customers can perceive from offline shopping. The author claimed that the augmented reality or 3D technology used to deliver such an experience is not up to the market consumers can have from offline shopping.

Customer loyalty program is another vital strategy adopted by the e-businesses to deliver better customer satisfaction. Customer loyalty program of online businesses involves subscription, special discounts, and special sales for the customers who purchased it. The program ensures online businesses to increase customer retention while satisfying the regular customers receive extra benefits (Choi, Yang, Yang, & Cheung, 2015).

With the customer loyalty program, companies can provide free of cost delivery, extra discounts, and access to early sales. Such strategies become the reason for adding the value of customer satisfaction to the shopping experience. The strategies are also attractive for customers to purchase products at a good rate and access unique products.

Positive and negative sides of e-business in fashion retailers

Shopping for fashion products online provides customers with positive and negative experiences. The customers and businesses imply both positive and negative aspects of online platforms. According to Kautish & Sharma (2018), less setting up charges and operational cost is the core benefit for e-businesses associated with an online business.

The author claimed that online-based organisations can set up their stores by developing the website and mobile applications where the need for expertise is also less. On the other hand, offline businesses require places to set up their stores and recruit staff to manage the stores.

Considering the factor, the author has also claimed that online businesses can start without problems and with the availability of a wide range of products (Dahana, Miwa, & Morisada, 2018). Added to the factor, it is also found in researches that set-up costs of online business can be done with the help of consultancy firms or freelancer who helps in developing business. The freelancer or consultancy firms also charge a minimal amount from the clients that are advantageous for online-based retail businesses.

On the contrary, online businesses also have negative sides related to the presence of high competition in the market (Bilgihan, Kandampully, & Zhang, 2016). In contemporary times, most fashion retailers have focused on shifting their business to the online platform. Thus, the competition in the platform has also been increased ever since the increase of businesses in the online platform.

The shift of offline fashion retail business in the online platform has the positive aspects of availability and a wide range for the customers and business. With the presence of business in online platforms, firms can reach out of their offline areas. Especially, the business from the SME sector has made it profitable to expand their reachability to the customers.

With the strategies of introducing business in online platforms, sales of the businesses also increase. While the customers find the opportunity to choose and purchase products from a wide range of options. Considering the fashion retail business, it can be said that the customers can check their preferred products’ size, price even fittings.

Augmented reality-based 3D technology empowers the customers to choose their preferred products and trial through the virtual world. Although purchasing fashion items with such an approach also has certain weak or negative aspects (Goswami, 2015). For example, the inability to check the quality of the products and feel by touching the products is quite difficult. Based on the Reasoned action theory, it can be said that the customers look for good quality fabric as their preferred outcome cannot be satisfied with the online shopping experience of fashion products.

Promotion is a big part of the businesses, which also applies to fashion retail. Promotional activities cost a high amount to the businesses, and thus the organisations always look for the cost-effective medium of a promotional campaign. In this case, the affiliate program and promotion through social media is simplified for the online business (Yeung & Ang, 2016).

It is because using social media and affiliation programs is easy for the business based on the online platform. The presence of the IT team made it easier for online businesses as the team can work collaboratively for both the management of e-commerce websites and social media promotion. Influencing customers and informing them about introducing new products also becomes easier for companies with these promotional approaches.

On the other hand, trust issues are also a negative aspect of online fashion retail business. Perceiving the products create trust among the customers that cannot be generated in online platforms (Khan & Uwemi, 2018). The e-businesses involve large and SMEs in the fashion retail business.

Though large businesses can ensure the quality and trust to purchase a product, it is quite difficult for the SMEs to generate trust among the customers. Trust issues concern small and medium-sized fashion retailers to attract customers and sell their products.

Role of e-business strategies on adding value to the customer shopping experience in fashion retail

e-business strategies of using 3D or augmented technology have become a trend for the customers of fashion retail business. With the technology or strategy, businesses can deliver a realistic customer experience. Regarding the technology, Nugroho (2019), claimed that the use of technology made it easier for the customers to purchase products at their preferred time and trial a similar fashion item with a different color.

In the modern-day, time is a big concern for the earners to went for shopping. The strategy of using 3D technology to trial the customers has become beneficial for the companies to enhance the footfall earning consumers. With the option, customers also feel satisfied as their valuable time is not occupied for the fashions or such work. Another crucial technology used in online fashion retail is Chatbot.

Using the technology, businesses can also deliver quick solutions to customer problems and their queries regarding products. If customers cannot find a specific fashion item’s preferred size, they can interact with the chatbot to receive further information (Dahana, Miwa, & Morisada, 2018).

Payment is another crucial aspect for online-based fashion retail businesses that can face failure issues. In such a case, customers can raise queries or complaints without problems. The consumers can raise the problems in a particular option in the online platform. This approach helps organisations assure customers of quick solutions and avoid receiving negative customer feedback.

Summary

By reviewing the literature associated with the topic, it can be said that e-businesses have been emerging rapidly since the initial years of the decade. Customers’ lack of time to purchase products and the availability of a wide range of products to choose from has influenced the growth of the business. Using strategies like a loyalty program, providing discounts, and using technology such as 3D has influenced the businesses to provide a better shopping experience to the customers.

Chapter 3: Research Methodology

Introduction

The customer shopping experience is an important parameter for determining the clients’ satisfaction levels and increasing customer loyalty and retention. The customer shopping experience is an important factor for online shopping and e-commerce as the customers frequently change their decision making and purchase preferences due to the perceived experiences of purchase and ease of accessibility of the E-Commerce websites.

This chapter of this study presents the research methodology for the investigation comprising the methodologies and techniques selected for answering the research questions by referring to the Saunders research onion. This chapter discusses the philosophy of the investigation along with the approach and design in addition to the strategy of data collection and analysis.

Figure 1: Research Onion.
Author: Saunders.

Research purpose

The basic purpose of any investigation is to answer the research problem and accomplish the objectives (Clarke, Tamaschke, & Liesch, 2013). The purpose of the research is to analyse how the business strategies of companies have to enhance the value of the business through the improvement of customer shopping experience by considering the case study of fashion retailers in Europe.

Accomplishing the following objectives has been the motive for the research:

  • To assess how e-business online strategies add value via the improvement of customer shopping experience
  • To determine the positive and negative sides of e-business in fashion retailers
  • To propose recommendations regarding e-business in the fashion retail industry

The primary purpose of the investigation is to accomplish the above-stated research objectives. The completion of the research has provided answers to the online strategies of fashion retail firms.

Research philosophy

Research philosophy dictates the researcher’s assumptions regarding formulating the investigation strategy and the investigator’s perspectives (Flick, 2015). This research has been conducted following the pragmatism philosophy for considering multiple methods of interpreting the study’s variables.

Pragmatism research philosophy is justified for this research as it enables the possibility of working with both quantitative and qualitative data and allows flexibility to the researcher for using any means for answering the research questions (Mackey & Gass, 2015). The positivism research philosophy has not been selected in the investigation due to the requirement of flexibility in terms of data collection methods (Saunders, 2011). The interpretivism philosophy has not been selected as it only focuses on the qualitative data.

Research Approach

The research approach is the framework that allows the investigator to determine the course of the investigation (Creswell, 2002). The research has been conducted with the detective approach to verify the existing theory about customer experience and value generation.

This research approach is justified due to the theory regarding customer shopping experience and the strategies of electronic business used in the fashion retail industry. The choice of the research approach has established the context for verifying the existing theory along with evidence of risk and abundant resources (Salkind, 2012). An inductive approach has been avoided due to the sufficient availability of literature and theory regarding the potential of e-business strategies.

Research Design

Research design represents the general plan for the investigation that presents an account of the procedures undertaken for solving the research problem. This research regarding the analysis of the business strategies of fashion retail companies for adding value to the business and enhancing the customers’ shopping experience has been pursued with the exploratory design (Doherty & Dickmann, 2012).

The choice of the research strategy is justified as there is insufficient research regarding the analysis of the factors of value addition for the online fashion retail companies with their e-business strategies and the subsequent influence on the customer shopping experience. The exploratory research strategy has been beneficial for analysing the relationship of cause and effect among the online e-business strategies of fashion retailers and business value, shopping experience.

A descriptive research design has been avoided due to the investigation’s consideration of primary data sources. In contrast, the explanatory design has not been chosen as it undertakes the process of in-depth explanation of the research components (Martínez-López, Gázquez-Abad, & Sousa, 2013). The exploratory research design has facilitated the investigator to explore the new elements regarding the investigation along with altering their progress pattern of the research as per the requirements.

Research Strategy

The research strategy indicates the plan of researching by undertaking specific activities to be completed within a designated time. This research has been conducted using a mixed-methods strategy as the researcher has considered both quantitative and qualitative information (Maxwell, 2012).

The mixed-methods strategy is justified for the investigation as it incorporates the perspectives of the customers of the fashion retail companies along with integrating the knowledge of the organisational managers. The mixed-methods strategy has ensured the elimination of bias in the findings along with the triangulation of the quantitative and qualitative findings to increase the authenticity and reliability of the research.

Data Collection Methods

The data collection procedures and the choice of methods is an important aspect of the research as it influences the quality of findings and the ability to meet the research questions (Olsen, 2011). The research has been conducted by considering both primary and secondary data sources for arriving at the findings.

The primary data for the research has been collected from both quantitative and qualitative sources to increase the availability of information and enhance the researcher’s quality of analysis. The quantitative data have been collected by conducting an online survey with targeted 710 customers of five fashion retail companies in Europe. The survey participants were given an online questionnaire through their email and Facebook containing close-ended questions. The companies chosen for primary data collection are PRIMARK, YOOX, TK MAX, H&M and Zara.

The qualitative data for the research was collected from one manager from each company. Five managers were chosen for the interview that was conducted over Skype. The open-ended interview questions allowed elaboration and expression of the managers’ perspectives.

The inclusion criteria for the survey were the company’s customers who have purchased products in the last 6 months. In contrast, the inclusion criteria for the interview was a minimum of two-year experience for the managers. The research had also included data gathered from secondary information sources like academic publications in books and research journals along with company publications and reports.

Data Analysis

The data collected from the survey responses were analysed using statistical measures and techniques to determine the percentage of responses in the customers’ opinion regarding their shopping experience in the online platform. Microsoft Excel was used to convert the collected data into graphs and charts for easy analysis and better representation of the findings.

The data collected through the managers’ interview was analysed using descriptive processes to identify the commonalities with the literature review and the survey findings (Vartanian, 2010). The findings from the primary and secondary data were compared for enhancing the reliability and authenticity of the findings along with understanding the differences in the organisational strategies and the factors of enhancing customer experience.

Sampling

Sampling is the process of selecting a subset of the overall respondents in research for the ease of analysis and reduction of time and cost by preserving the authenticity of the findings by drawing inferences about the population. The sample size for the survey participants was calculated using a 95% confidence level and a 5% margin of error. A sample size of 250 participants was considered for the data analysis.

50 customers from each of the five retail companies where are selected for being represented in the sample size. The strategy of purposive sampling was considered for intentionally selecting some participants due to their vivid shopping experiences and record of accomplishment of repeat purchases from the companies through the years (Emmel, 2013). The choice of purposive sampling is justified, as the selected participants were able to elucidate the differences in shopping experience before the Covid-19 pandemic by visiting the retail stores and switching to the online mode after the pandemic.

Reliability and Validity

The research findings are reliable due to the ability to provide similar results if the techniques are repeated. This is due to the purposive sampling selected for selecting the participants to feature based on the purposive sampling method for increasing the authenticity and reliability of the findings (Baumgarten, 2013).

The choice of mixed-methods also increases the validity of the research as it delivers answers to the research questions and accomplishes the research objectives. Using quantitative and qualitative sources delivers the reality of customer experience in the fashion industry and the impact of e-business strategies.

Accessibility Issues

Some accessibility issues were faced while conducting the investigation. The inclusion of a large sample size made it initially difficult to generate responses from the fashion retail companies’ customers and understand the customers’ experience due to purposive sampling (Karlsson, Andersson, & Norman, 2015).

However, it was possible to reach out to the customers with the help of the fashion retail companies. It was also initially difficult to reach out to the managers of the companies due to their busy schedules. This problem was resolved by contacting them for the interview during their break time and informing them in advance.

Ethical Considerations

The research was conducted by following the ethical guidelines and protocols of the university as it involves the representation of primary data and participants. Ethical considerations were maintained in the study by asking for informed consent from the participants before data collection (Wiles, 2012). The participants were not asked any personal questions, and their anonymity was maintained, providing them with the flexibility of avoiding any questions or leaving the procedure at any point in time.

Summary

The research has been conducted with the pragmatism methodology. In contrast, the deductive approach has been used for evaluating the existing theory about the customer shopping experience and companies’ online strategies. The exploratory design has been selected for investigating with the mixed methods of data collection involving quantitative and qualitative data collected from the customers and managers of five fashion retail companies in Europe. The specific traits and attributes of the participants were selected in this study for purposive sampling.

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